It’s a busy week for data traders as we price in PMIs that may confirm global growth slowdown and Powell possibly rejecting a “dovish pivot.”
What exactly are market players watching this week?
But before that, ICYMI, I’ve written a quick recap of the market themes that pushed currency pairs around last week. Check it!
And now for the closely-watched potential market movers this week:
Major Economic Events:
Manufacturing and services PMIs – Global growth worries can escalate this week as major economies publish their August flash PMI reports.
Australia will get the ball rolling today at 11:00 pm GMT with potentially a weaker manufacturing (from 55.7 to 55.0) but stronger services (from 50.9 to 51.0) PMIs. Japan will follow on Tuesday at 12:30 am GMT with a similar dip in manufacturing (from 52.1 to 51.9) but stronger services (from 50.3 to 50.5) PMIs.
August 23 Eurozone PMIs will likely get more attention, and unlike in Australia and Japan, markets see further deterioration for both manufacturing and services activities.
France (7:15 am GMT) could see manufacturing dip from 49.5 to 48.3 and services drop from 53.2 to 52.1. Germany (7:30 am GMT) may report similar declines in manufacturing (49.3 to 47.8) and services (49.7 to 49.3) indices.
Eurozone PMIs (8:00 am GMT) will also be closely looked at after the composite PMI contracted (49.9) in July. Manufacturing (49.8 to 48.6) and services (51.2 to 50.8) may see more slowdowns while the composite PMI dips further into contraction territory.
Meanwhile, the U.S. PMIs (Aug. 23, 1:45 pm GMT), which is expected to report weaker manufacturing (52.2 to 51.1) but improving services (47.3 to 48.0) indices.
U.S. preliminary GDP (Aug. 25, 12:30 pm GMT) – Upside revisions to consumer spending numbers are expected to pull Uncle Sam’s Q2 GDP from -0.9% to -0.8%. Small improvement but still a technical recession tbh.
Jackson Hole updates – Hawkish speeches by Fed members helped push the dollar higher last week. Let’s see if Powell can put to rest any “dovish pivot” speculations with his keynote speech later this week. Don’t even think of missing the headlines!
Forex Setup of the Week: EUR/NZD
EUR/NZD 4-hour Forex Chart
EUR/NZD just got rejected from the 4-hour chart’s 200 SMA and 1.6250 area of interest!
The pair looks ready for another turn lower as the 4-hour chart shows a divergence between price and oscillator. It also doesn’t help that EUR/NZD has shown long wicks and a low-key Evening Star pattern before getting rejected at the 200 SMA.
Will this week’s Eurozone PMIs extend EUR’s downtrend against NZD?
Confirmation of weaker consumer and business sentiment and activity in the region can drag EUR/NZD down to the 1.6100 previous support.
If this week’s releases surprise to the upside, though, or if traders turn against higher-yielding bets like NZD in favor of “safe haven” EUR, then EUR/NZD could break above its August resistance and make new monthly highs.
This post first appeared on babypips.com
